Hospitals, Bonds, and Big Banks
To build billion-dollar hospitals, like Essentia Health’s new facility in Duluth, systems turn to the municipal bond market. Investors and credit agencies rate hospitals—often based on nurse staffing “efficiencies.” These agencies use coded language like:
- “Labor costs”
- “Workforce optimization”
- “Strategic plan”
Translation? Fewer nurses, more profits. But patients aren’t line items. And nurses aren’t robots.
Lean Management: Cutting Corners in Care
What Is “lean” in healthcare? The lean model aims to cut waste. In hospitals, it often means:
- Fewer nurses per patient
- Just-in-time staffing and supplies
- Fewer support staff
- Missed breaks and rushed care
“The problem with that is patients, of course, are not widgets and nurses are not robots … And nursing care is not a commodity but a service. It’s a process that requires critical thinking and the application of judgment.” – DeAnn McEwen, a health and safety specialist with National Nurses United
Lean Management in Minnesota Hospitals: The Allina and Fairview Stories
Allina Health: Cutting Costs at Patients’ Expense
Allina Health has a long history of using lean management strategies to boost profits. Executives proudly reference their “Performance and Business Transformation” efforts—but what does that really mean? In practice, these efforts often come at the expense of patients and healthcare workers. Over the last two years, Allina has made aggressive cuts to nurse-to-patient staffing, with a goal to have worse staffing levels than 60% of comparable hospitals. What does that mean for patients?
- Less time with their nurses
- Delayed or missed care
- Higher stress for bedside staff
Allina’s lean strategy may look efficient to bankers and other finances executives sitting on the health system’s board—but for patients and workers, it means care is compromised in the name of profitability.
Fairview Health: From Airbags to Hospitals
James Hereford, CEO of M Health Fairview, made his name applying the lean model to healthcare—an approach borrowed from manufacturing. At the time of his hiring, Hereford’s experience was praised: “He’s a health system executive who once taught statistical process control at Boeing and who now is eager to show his Fairview colleagues a big automotive air bag factory in northern Utah so good at quality management that it’s approaching perfection.” – Lee Schafer, Star Tribune But perfection for airbags doesn’t always translate to patient care. Under Hereford’s leadership, Fairview has doubled down on benchmarking and lean staffing models. In a call with investors in May, the system announced $49 million in staffing cuts, with “further opportunities for efficiencies and staff reductions.” These initiatives force nurses to do more with less, stretching them thin and increasing the risk of:
- Delayed treatments
- Missed medications
- Unsafe patient loads
The result? Lean for the bottom line, but heavy consequences for patient care.
Executive Pay vs. Patient Care
While hospitals cut staffing, CEO pay soars:
- James Hereford (Fairview): $3.5 million – 50x more than the average nurse.
- Lisa Shannon (Allina): $2.7 million- 30x more than the average nurse.
What could that money do for patients? More nurses. More care. Better outcomes.
Power Players Behind the Healthcare Curtain
As healthcare becomes more profit-driven, key decisions are increasingly made by bankers and corporate executives—not doctors or nurses. These powerful financial players sit on hospital boards, shape staffing decisions, and prioritize returns over care. Here are the elite financial and business interests pushing a model that puts profits before patients and healthcare workers.
U.S. Bank: Financing Healthcare, Influencing Hospitals
Minnesota’s U.S. Bank, the 5th largest bank in the country, plays a direct role in our hospital systems. As both a lender and a “master trustee” for hospitals, U.S. Bank’s reach is deep. Current and former U.S. Bank executives serve on the boards of Allina Health, Fairview, and Children’s Minnesota, helping shape policies that impact patient care.
Piper Sandler: Investment Banking Meets Healthcare
Minnesota-based Piper Sandler has earned over $1 billion underwriting hospital bonds for systems like Allina Health, Children’s Minnesota, and HealthPartners. Executives from the firm have sat on Allina’s board since the early 1990s and serve on boards of influential organizations across business, education, and healthcare lobbying. “Both the healthcare and financial services sectors are significant contributors to our overall results.” – Piper Sandler Annual Report
Minnesota Business Partnership (MBP)
MBP represents over 100 of Minnesota’s top CEOs, including leaders from Mayo Clinic, Target, UnitedHealth Group, and Best Buy. This powerful group has opposed:
- Corporate transparency laws
- Paid family and medical leave
- Campaign finance reforms
Should these same CEOs be trusted with our hospitals?
Medical Alley: The Healthcare Lobby
Medical Alley is Minnesota’s medical technology trade group, with hospital executives from Fairview and Allina Health on its board, alongside executives from UnitedHealthcare and Piper Sandler. While they promote “healthcare transformation,” their real interest may lie in protecting corporate profits—not patients or nurses.
The Federal Reserve’s Healthcare Connection
The Federal Reserve Bank of Minneapolis oversees banks and economic policy across the Upper Midwest. Some of the same hospital board members responsible for cutting nurse staffing also help shape regional economic policy. Is it right for those maximizing hospital profits to guide our financial systems?
Take Action: Put Patients Before Profits
Hospital executives and their corporate boards are making choices every day that impact your care. You can speak up. Tell hospital executives to:
- Stop understaffing nurses
- Prioritize patient safety
- Use healthcare dollars for care—not bonuses